A NOTE: The moral of the following story may be transformational. For the facts of this merger effort are so absurd and anti-member, that the general public can easily see the cooperative crisis at hand. If this event triggers an industry examination, then good news good may result from this overt corruption of everything credit unions stand for.
In a democracy, the basic power of the people over their leaders is the right to vote.
On October 27, member voting was closed at SAFE. All the votes were in. But no vote totals have been announced after almost two weeks.
The elections were called, organized, controlled and managed by one side, that is the five senior managers and the board, seven of whom will directly benefit if the merger is approved. These seven, will be awarded over $15 million in bonuses on top of ongoing salaries and benefits.
Why have not totals been released? The only answer is that the facts would undermine the narrative SAFE has been spinning about the merger.
The data gap could be as simple as the merger was turned down. How do we announce that?
Or the vote margin was so narrow that requesting the regulator override the outcome would be inconsistent with protecting members’ best interests.
Of if the vote showed 90-95% of members did not vote, then this participation failure would be light years away from the 50% required in state law. This voting gap would demonstrates one thing—that the credit union made zero effort to inform members about this life or death decision of their institution.
SAFE is like a defeated political party, in power, trying to figure out how to spin the outcome in an election in which they controlled all the resources and messaging. Low participation undermines any pretense of democratic accountability. It compromises the integrity of the credit union governance process.
Like authoritarian leaders in other democratic contests, SAFE’s incumbents are rigging the outcome to try to thwart both state law and members’ interests.
A merger would transfer over $440 million in capital for free to an organization that had zero role in generating it and gives the owners $0 for their collective economic interest. Except for the seven insiders who helped themselves off the top.
A More Catastrophic outcome–The Exploitation of Member Owners
Credit unions had one simple approach to member value, what is good for the least is good for all. SAFE is the latest example of turning this cooperative principle upside down. What is good for senior management. . . .
SAFE’s leaders are causing the worst kind of economic harm one can imagine to a credit union and its member-owners.
It is shutting down their 85-year independent charter, turning over a successful locally focused $4.5 billion financial institution to strangers. SAFE owners had no role in selecting and no information about their business model. They know nothing about their future fate with BECU.
This give-away is worse than financial theft. The SAFE leaders are using their positions of trust and accountability to present an option that from the latest data will cost them more for loans, pay them less for savings and require more in overhead expenses.
Cooperatives were supposed to be immune from this ever present human impulse to maximize personal gain from those you serve.
Credit unions are neither financial angels nor beasts, but in pretending to be angels, have become beasts.
Credit union mergers have devolved into cooperative theft organized by leaders in two organizations who show no capacity to distinguish right from wrong. It is the ethic of the bully, the powerful and those who gained positions of authority via democratic subterfuge
A Cooperative Odor is Spreading
The whole merger effort reeks from this mixture of nonsensical financial proposition, the rhetorical propaganda of PR cliches, and the self-dealing of those entrusted with the stewardship of member-owner wealth.
This stench is spreading across credit union land, with individuals urging boards and CEO’s to get a good merger deal before it is too late. That is before the public becomes aware and this whole cooperative looting scheme is shut down. SAFE’s example, just one of many, will smear the entire good works, self-discipline and beneficial credit union conduct of those who refuse to play the game of beggar thy neighbor.
This industry cannibalization will stop only when credit union leaders who now plead for a common ground of unity move to a higher ground. For it is not just SAFE, but the entire cooperative system that is operating with this internal disease of self dealing corruption.
The financial liberty credit unions offered is not dependent on their special design and purpose, but rather the responsibility each coop leader does or does not take. Institutions won’t save us. People will.
The Essential First Step
The minimal first step to curing this cooperative epidemic of self destruction is to reveal how members voted in SAFE’s merger. Why has this most fundamental practice of democracy been withheld?